Trump vents over 'good news is bad news' dynamics

The US economy grew faster than expected in the third quarter, with GDP expanding at an annualised rate of 4.3%. President Donald Trump praised the figures, which exceeded forecasts of 3.2%. Meanwhile, speculation is building over his preferred candidate to lead the Federal Reserve after Jerome Powell’s term ends in 2026.

The latest GDP report showed stronger-than-anticipated growth, reaching 4.3% for Q3. Trump highlighted the result as proof of economic strength but noted that markets now react negatively to positive data. Investors fear strong performance could prompt the Fed to raise interest rates, reversing recent trends.

Inflation remained stubbornly above the Fed’s 2% target during the same period. The PCE price index and core PCE both rose to 2.8%, keeping pressure on policymakers. Despite this, Trump downplayed concerns, suggesting inflation would resolve itself over time. Looking ahead, traders see a 54.4% chance that rates will stay unchanged at the Fed’s March meeting. A 40.7% probability exists for a 25-basis-point cut, with only a 5% chance of a deeper reduction to 3.00%-3.25%. Trump has made clear he wants his future Fed Chair to cut rates when markets are strong, rather than waiting for downturns. Reports confirm Trump is backing **Kevin Hassett** as Powell’s successor when his term expires in May 2026. The president has hinted at this choice during White House events, emphasising the need for rate cuts that support growth. He even suggested that the right adjustments could push GDP significantly higher. For now, the Fed is expected to hold rates at 3.50%-3.75% at its January meeting. But with inflation lingering and Trump’s public stance on monetary policy, debates over the central bank’s direction are likely to intensify.

The Q3 GDP surge has put the Fed’s next moves under scrutiny, with markets bracing for potential rate hikes. Trump’s push for Hassett as Fed Chair signals a shift toward looser monetary policy if his candidate takes office. For now, traders are betting on stability—but the economic and political landscape could change quickly.